Eurozone governments are looking to the European Central Bank and national central banks to help pare back the cost of a second rescue package for Greece which would otherwise amount to €170 billion.
Greece may need €136 billion in fresh bailout funding from the European Union and International Monetary Fund – in addition to the €34 billion left over from Greece’s first bailout. This is €6 billion more than EU leaders agreed in October. Germany, the Netherlands and Finland have insisted on paying no more than €130 billion.
Eurozone finance ministers hope the ECB can contribute by forgoing some of the future profits it would earn on its Greek bondholdings, which it has said it is willing to do. A central bank contribution would help the eurozone and IMF to keep their contribution to €130 billion. It would also reduce Greece’s ratio of public debt to GDP in 2020 closer to the 120 per cent the IMF deems sustainable, permitting it to take part in a second rescue.
Eurozone finance ministry officials were still debating the terms of debt restructuring – including whether to force more losses on private bondholders – and how to bring down the size of the total bailout. “I don’t think there is a majority to go a different way because a different way is enormously arduous and costs lots and lots of money”, said Maria Fekter, the Austrian finance minister.
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